Interesting things are happening for the Ethereum ecosystem lately. While the EIP-1559 upgrade introduces gas burning, the median gas usage is hitting new long-term highs. Moreover, the supply last active in the past year is hitting highs, confirming holding ETH is still a viable approach.
The Median Gas Usage Situation
Ethereum is one of the blockchains that require “gas” as a transaction fee. Although this fee is paid in Ether and doesn’t require a separate currency, it is often a subject of debate. Rising gas fees can pose issues for both users and dApps alike, and it has been a problem for Ethereum for a while. However, the recent EIP-1559 upgrade has introduced a solution of sorts, as gas is now being burned on the network to reduce the overall ETH supply.
However, that doesn’t mean transactions become cheaper for the users, unfortunately. It is still somewhat common to pay $50 or more for a transaction, posing problems for everyone involved. High transaction fees aren’t beneficial to anyone, yet it is not an easy problem to solve. The thousands of smart contracts all generate a constant data flow that needs to be processed.
The growth of Ethereum as a popular blockchain gives rise to higher median gas usage. More specifically, the network is currently at a five-year high in that metric. A surprising development, although the Ethereum blockchain is home to many popular decentralized services. Additionally, there is the NFT and DeFi craze to push the median gas usage higher.
Per ETHGasStation, Uniswap, Tether, and 1Inch are still the main gas guzzlers. These services generate between $390,000 and $2 million in gas fees per month. Although they have been contributing to the median gas usage for a while now, those numbers continue to increase. Moreover, they operate at a high gwei average, although that applies to nearly all smart contracts on Ethereum these days.
Long-Term Holding is Viable
It is equally important to look at how people are handling their ETH balance. When prices rise or fall, there will often be short-term market momentum in either direction. However, it would appear that holding ETH for a longer period remains popular. The supply last active 6-12 months ago hit a 13-month high all of a sudden. It is a strong indicator of how people look at Ether these days.
Ensuring people continue to hold ETH will be the bigger task. It will primarily depend on the ongoing price changes coming to Ethereum and other cryptocurrencies. If the price spikes to a new all-time high, more people will have an incentive to sell ETH in the future. Even so, holding for the long term can prove more beneficial, regardless of the current price.